Interactive Investor

Discount Delver: the 10 cheapest trusts on 8 September 2023

8th September 2023 10:04

by Kyle Caldwell from interactive investor

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We reveal the biggest investment trust discount changes over the past week.  

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Investment trusts, due to their closed-ended structure, offer investors the chance of picking up a potential bargain. Such an opportunity arises when a trust’s share price is lower than the underlying investments held by the trust (the net asset value, or NAV).  

However, a trust trading on a discount to NAV is not necessarily a buying opportunity. There’s likely a good reason why the trust is cheap, such as subdued short- or long-term performance, or poor investor sentiment towards how it invests.  

In our weekly series, interactive investor highlights the 10 biggest investment trust discount moves over the past week. We publish this article every Friday, using data up to the close of trading the previous day.  

In total, nearly 400 investment trusts have been screened, with the data sourced from Morningstar. Venture Capital Trusts (VCTs) have been excluded. We also strip out trusts with less than £20 million in assets and those that are not available on the interactive investor platform.

Investment trusts providing exposure to alternative assets remain out of favour due to the higher interest rate environment. With income of 4% to 5% on offer in lower-risk areas – cash and bonds – there’s less incentive to take on higher levels of risk elsewhere.

The alternative asset trusts featuring in this week’s table are Gresham House Energy Storage (LSE:GRID)Bellevue Healthcare (LSE:BBH), HICL Infrastructure (LSE:HICL), Foresight Sustainable Forestry (LSE:FSF), Digital 9 Infrastructure (LSE:DGI9), Syncona (LSE:SYNC)Supermarket Income REIT (LSE:SUPR), and Warehouse REIT (LSE:WHR)

Also among the top 10 discount movers this week are UIL (LSE:UTL), which sits in the flexible investment sector, and abrdn Japan Investment Trust (LSE:AJIT), seeking to profit from shares listed in the East Asian country.

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Gresham House Energy Storage Renewable Energy Infrastructure-16.4-6.30
UIL Flexible Investment-37.3-6.00
Bellevue Healthcare Biotechnology & Healthcare-8.8-4.70
abrdn Japan Investment Trust Japan-9.1-4.00
HICL InfrastructureInfrastructure-22.3-3.70
Foresight Sustainable Forestry Farmland & Forestry-14.3-3.70
Digital 9 Infrastructure Infrastructure-49.9-3.40
Syncona Biotechnology & Healthcare-31.6-3.00
Supermarket Income REIT Property - UK Commercial-22.9-2.90
Warehouse REIT Property - UK Logistics-34.8-2.70

Source: Morningstar. *Data from close of trading 31 August 2023 to close of trading 7 September 2023.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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